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Richard Hardy
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Difference between forecasting accuracy and forecasting error?

I am working on a demand forecasting project and I am puzzled by the client's standards of forecast evaluation. The MAPE (Mean Absolute Percentage Error) with the sample data Forecast = 300 and Demand = 100 is $$ \text{MAPE} =\frac{|300-100|}{100} =3 $$

However the client focuses on forecasting accuracy. It is defined as $$ \text{Accuracy}=\max(0,1-\text{MAPE}) $$

This means that a MAPE of 1, 3 or 3000 gives the same forecasting accuracy of 0. To me this does not make sense, because it is equivalent to restricting MAPE to $\text{MAPE}_r = \max(1,\text{MAPE})$.

However, it seems to be in line with the measurement of forecasts in the demand planning ecosystem http://demandplanning.net/MAPE.htm. Can someone please explain to me why this could be useful?

HOSS_JFL
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